LEASE FINANCING IN POLAND
By Pankaj Rathi
Roll No. 869
Semester V (U.G)
INTRODUCTION
• A lease is a contract whereby the owner of an asset (the lessor)
grants to another party (the lessee) the e...
THE LEASE MARKET IN POLAND– AN
OVERVIEW
•WHO ARE THE ‘LESSORS’?
46%
48%
6%
Share of different lessors in the Polish
Leasing Market
Polish Banks Finance Companies ...
55%
36%
4%
5%
Product wise division of Polish Leasing Market
Vehicle
Machinery and
Equipment
Transport
others
•CAPITAL GOODS
•CUSTOMER SHARE
56%
39%
2% 3%
Segment-wise Customer Share in the Polish Leasing
Market
Services
Industry
Agriculture
Publi...
REGULATORY MEASURES FOR THE LEASE
MARKET IN POLAND
•LEGAL BACKGROUND
• Leasing agreement is an agreement which is regulated
separately by the Polish Civil Code.
• leasing is...
•TAX PROVISIONS
• Corporate Profit Tax [CIT]
• In line with the general definition envisaged in the CIT Act, lease
agreeme...
Operating leasing
• In order to treat the agreement as an operating lease, the following
conditions have to be met:
• a) t...
•Financial leasing
• In order for an agreement to be qualified as financial leasing,
the following conditions have to be m...
• Special rules for passenger cars
• Leasing as supply of goods
The Polish VAT provisions treat as a supply of goods the r...
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Lease financing in poland

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Lease financing in poland

  1. 1. LEASE FINANCING IN POLAND By Pankaj Rathi Roll No. 869 Semester V (U.G)
  2. 2. INTRODUCTION • A lease is a contract whereby the owner of an asset (the lessor) grants to another party (the lessee) the exclusive right to use the asset in return for the payment of rent. • Total worth of the Polish Leasing Market – CHF zł.22.2 billion (as of December 31, 2011)
  3. 3. THE LEASE MARKET IN POLAND– AN OVERVIEW
  4. 4. •WHO ARE THE ‘LESSORS’? 46% 48% 6% Share of different lessors in the Polish Leasing Market Polish Banks Finance Companies Other companies
  5. 5. 55% 36% 4% 5% Product wise division of Polish Leasing Market Vehicle Machinery and Equipment Transport others
  6. 6. •CAPITAL GOODS
  7. 7. •CUSTOMER SHARE 56% 39% 2% 3% Segment-wise Customer Share in the Polish Leasing Market Services Industry Agriculture Public Sector
  8. 8. REGULATORY MEASURES FOR THE LEASE MARKET IN POLAND
  9. 9. •LEGAL BACKGROUND • Leasing agreement is an agreement which is regulated separately by the Polish Civil Code. • leasing is an agreement under which a lessor undertakes to purchase an asset from a given seller and release it to the lessee for use. • The lease contract is deemed invalid if it is not concluded in writing.
  10. 10. •TAX PROVISIONS • Corporate Profit Tax [CIT] • In line with the general definition envisaged in the CIT Act, lease agreement is an agreement referred to in the Civil Code, as well as any other agreement, under which a lessor gives to the lessee for use against a consideration or for deriving benefits depreciable fixed or intangible assets as well as land. • The above definition does not cover the perpetual usufruct rights, which gave rise to the standpoint expressed by the Ministry of Finance that such rights cannot be subject to the lease agreement. • The provisions of Polish tax law do not explicitly refer to such terms as operating and financial lease; however in practice these terms are commonly used.
  11. 11. Operating leasing • In order to treat the agreement as an operating lease, the following conditions have to be met: • a) the leasing agreement has been concluded for definitive period of time, constituting at least 40% of the normative depreciation period (the period in which tax depreciation write-offs become equal to the initial value of the fixed asset), if it concerns movables or intangible assets, or has been concluded for a period of at least 10 years, in the case of real property; and • b) the total of payments (less VAT), corresponds to at least the initial value of the assets
  12. 12. •Financial leasing • In order for an agreement to be qualified as financial leasing, the following conditions have to be met: • a) the lease agreement has been concluded for a definite period of time; b) the total of payments (less VAT) corresponds to at least the initial value of the assets; c) the agreement provides that during the primary lease period, depreciation write-offs are to be made by the lessee
  13. 13. • Special rules for passenger cars • Leasing as supply of goods The Polish VAT provisions treat as a supply of goods the release of goods under the lease contract that satisfies the following conditions: is qualified as financial lease under the CIT provisions (i.e. depreciation write-offs are made by the lessee) and - provides that in the normal course of events envisaged in the contract or at the latest upon payment of the final installment, ownership shall pass to the lessee • Leasing as supply of services Other lease agreements that do not satisfy the conditions to be classified as supply of goods for VAT purposes, are treated as supply of services

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